Understanding exact sequences
Let’s start with a motivating question I had from group theory: if $N \trianglelefteq G$ is a normal subgroup, is it necessarily true that $G\cong G/N\times N$? Looking at non-abelian groups quickly shows that the answer is no (take the dihedral group $D_3=\langle r,t \mid r^3=t^2=1, rt=tr^{-1}\rangle$ and the normal subgroup $\langle r\rangle\cong \mathbb{Z}/3$).
I later learned about semidirect products $\rtimes_\phi$, which generalize the direct product $\times$. But even this was insufficient to describe group decompositions.
Eventually, I was turned to a diagram that looked something like this
$$ \begin{equation} 1 \xrightarrow{} N \xrightarrow{\iota} G \xrightarrow{\pi} Q \xrightarrow{} 1, \end{equation} $$
and was told that it was a short exact sequence if $\iota$ is injective, $\pi$ is surjective, and $\ker{\pi}=\mathrm{im}~\iota$. This was supposed to reveal some structure to the group. I want to look deeper into that here, and see where exact sequences have shown up elsewhere.
Unpacking the definition with quotient groups
Let’s start with the familiar example: the objects in (1) are groups and the arrows are group homomorphisms. In particular, we will look at when $Q$ is the quotient
$$ \begin{equation} 1 \xrightarrow{} N \xrightarrow{\iota} G \xrightarrow{\pi} G/N \xrightarrow{} 1, \end{equation} $$
It makes sense to think of $\iota\colon N\to G$ as an inclusion map (indeed, $N$ is just a subset of $G$, so the inclusion map is given by $n\mapsto n$) and $\pi \colon G\to G/N$ as a natural projection (i.e. $g\mapsto gN$).
Let’s look deeper into what the statement “$\mathop{\rm im}{\iota}=\ker{\pi}$” means. $\iota$, as an inclusion map, effectively embeds $N$ into $G$ (that is, it places the algebraic structure of $N$ into $G$). By saying that $\ker{\pi}$ is the image of $\iota$, we are saying that $\pi$ sends everything in the image to the identity. Why is this intuitive? Recall we define the quotient group $G/N$ as the cosets of $N$. Specifically, the identity element is just $N$. This means that we represent $N$ as a single element in $G/N$.

An exact sequence of groups. $g_1N$, $g_2N$ are cosets of $N$ inside $G$.
In general, a short exact sequence tells us that the object $N$ embedded in $G$ will be identified with a single element in $Q$.
(Long) exact sequences and complexes
Now we can start to look at larger sequences of objects, such as the following:
$$ \begin{equation} G_0 \xrightarrow{\phi_1} G_1 \xrightarrow{\phi_2}\cdots \xrightarrow{\phi_{n-1}} G_{n-1}\xrightarrow{\phi_n} G_n. \end{equation} $$
This sequence is exact if $\mathop{\rm im}{\phi_i}=\ker{\phi_{i+1}}$ for $1\leq i\leq n-1$. Perhaps a nicer way to relate this to the previous discussion is the equivalent definition.
Definition.
A sequence
$$ \begin{equation*} G_0 \xrightarrow{\phi_1} G_1 \xrightarrow{\phi_2}\cdots \xrightarrow{\phi_{n-1}} G_{n-1}\xrightarrow{\phi_n} G_n. \tag{3} \end{equation*} $$
is exact if the sequences
$$ \begin{equation} \begin{split} 1 \xrightarrow{} K_1 \xrightarrow{\iota} &G_1 \xrightarrow{\phi_2} K_2 \xrightarrow{} 1 \\ 1 \xrightarrow{} K_2 \xrightarrow{\iota} &G_2 \xrightarrow{\phi_3} K_3 \xrightarrow{} 1 \\ &\vdots\\ 1 \xrightarrow{} K_{n-1} \xrightarrow{\iota} &G_{n-1} \xrightarrow{\phi_n} K_n \xrightarrow{} 1, \end{split} \end{equation} $$
where $K_i = \mathop{\rm im}{\phi_i}$, are all short exact.